Mukesh Mukesh, who has a Masters in Business Administration from Stanford University, handles technology, strategy and operations,

flagship firm Reliance Industries would now be under the total control of elder sibling Mukesh Ambani. The firm has its interests spread over Oil refining, petrochemicals, oil retailing and oil exploration. Mukesh would also now have on his own the control of IPCL, the petrochemical firm. Anil Anil, is the public face of the company and looks at all matters financial. Anil would now preside over Reliance Energy, involved in power generation and distribution, Reliance Infocomm and Reliance Capital, a non-banking finance company. Anil's notional wealth from his REL investment , Rs 1,149 crore (Rs 11.49 billion).

Ownership pattern after Dhirubhai Ambani s Death The question of negotiating on Reliance Industries does not arise at all because Mukesh Ambani controls the investment companies which control Reliance Industries," the executive said, adding, "This is the legacy of Dhirubhai Ambani [ Images ] -- the Reliance chairman controls the investment companies."
Persons Acting in Concert. Reliance promoters (persons acting in concert)

http://in.rediff.com/money/2004/nov/29family.gif The Split Reliance Natural Resources, Reliance Communication Ventures, Reliance Energy Ventures and Reliance Capital Ventures

Following are facts related to interests and performance of companies divided between Mukesh (Reliance Industries Ltd [ Get Quote ], IPCL [ Get Quote ] and Anil (Reliance Energy Ltd [ Get Quote ], Reliance Capital [ Get Quote ], Reliance Infocomm) in that order. Reliance Industries Ltd (RIL): The group flagship, is the second largest company by market capitalisation on the Bomba Stock Exchange after ONGC [ Get Quote ], having an m-cap of Rs 83,729.05 crore (Rs 837.290 billion) as on June 17. The company, with net profits of Rs 7,572 crore (Rs 75.72 billion) for the year ended March 31, 2005, operates the world's third largest refinery in a single location, in Gujarat, with a capacity of 660,000 barrels per day.

The Reliance ownership issue: Complete Coverage

RIL, in which foreign funds holding is 21.55 per cent, is expanding its petrochemicals capacity to over 14 million tonnes per annum (mtpa) from 12 mtpa in the next few years to become the world's largest producer of polyester yarn and fibre. It has struck gas in the Krishna Godavari basin and has in place reserves of an estimated 14 trillion cubic feet. Indian Petrochemicals Company Ltd (IPCL): With net profits of Rs 786 crore (Rs 7.86 billion) in FY 05, IPCL is India's secondlargest petrochemicals company, operating a naphtha-based petrochemicals complex and two gas-based complexes. Reliance Energy Ltd (REL): REL which had a net profit of Rs 520.29 crore (Rs 5.202 billion) in fiscal 2005 is India's largest integrated private sector company with an installed capacity of 941 MW. The company plans to commission a 3,740 MW power plant in Uttar Pradesh [ Images ] at Dadri. The plant is said to be the world's largest gas-based plant. It will get its gas supply from RIL. Reliance Energy has drawn up further plans to invest Rs 180 crore (Rs 1.80 billion) in transmission. Reliance Infocomm: The company is the country's largest mobile phone service provider having more than 11.50 million subscribers as in June 2005. It acquired undersea cable company, Flag Telecom, in 2004 and prior to the split, RIL held 45 per cent in Infocomm. The company is currently unlisted while the settlement has raised speculation that the company may go in for an IPO. Reliance Capital: With net profit of Rs 105.81 crore (Rs 1.058 billion) in fiscal 2005, Reliance Capital is engaged in asset financing and also operates a mutual fund. Copyright 2012 PTI. All rights reserved. Republication or redistribution of PTI content, including by framing or similar means, is expressly prohibited without the prior written consent.

parent firm transferring its holdings in power generation, financial services and cellular business to a separately listed firm to be run by Anil.

Current investors will get the shares of new firm at the same ratio of their holding pattern in Reliance.
This structure achieves two other objectives. First, there are no tax implications. And second, under Sebi rules the new holding company can get automatically listed on the stock exchange, since it has the same shareholding structure as the already listed Reliance Industries. This will involve the holdings of group investment firms but would avoid having to untangle their complicated internal structures. Controlling ownership will then be aligned with management control in RIL as well as in the new holding firm. Since Reliance Industries, which goes to Mukesh, will be valued at more than the new holding company, Mukesh will in effect have to pay Anil cash as part of the mutual transactions. The amount involved is not known, but informed sources have said it is substantial. Even these payments, it is said, are tax-free if made as a gift to a relative.

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The holding company will own the controlling shares of Reliance Energy, Reliance Infocomm and Reliance Capital. It will have the same shareholding as Reliance Industries Mukesh and Anil Ambani [ Images ] will buy out each other's shares in the two holding companies Controlling ownership will be aligned with management control in Reliance Industries as well as in the new holding firm

Current Holding pattern y y y Corporate Governance issues : Union Company Affairs Ministry and SEBI
Sebi and department of company affairs (DCA).

Inaction :Serious charges of corporate misgovernance were levelled against the company. The government was supplied with enough documents to justify a proper probe into the manner in which the investors' interests were compromised. The ministry of company affairs moved very slowly on the issue. The Securities and Exchange Board of India also displayed no desire to take suo motu action on the many instances of misgovernance in Reliance.

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Reliance Industries lends associate firms money, mostly without interest The associates use the money (about Rs 1,400 crore) to buy shares in Reliance Petroleum After Reliance Petroleum's merger with Reliance Industries, the associates own 4.7% of Reliance Industries

The Securities and Exchange Board of India [ Images ] has asked Reliance Industries [ Get Quote ] for a detailed briefing of the decisions taken at various board meetings in the last couple of years and specifically to classify the various decisions the company thinks are of a price-sensitive nature. Sebi has asked Reliance to reply whether there was any violation of the listing agreements, and whether the board decisions were disclosed to the exchanges in a timely manner. After Anil Ambani [ Images ] made some comments on the issue of the buyback by Reliance Industries and the price movements in the scrip, Sebi has also been closely studying the movements of the scrip and the various transactions on the counter.

Market regulator SEBI's conditional clearance to Reliance Industries [ Get Quote ] programme for buyback of shares may have been prompted by a letter written by RIL vice chairman Anil Ambani [ Images ] late last month.

potential conflict of interests of Nimesh Kampani as trustee of Petroleum Trust, which holds 7.5 per cent RIL equity, and as Chairman and Managing Director of J M Morgan Stanley, the manager of the buyback.

It is for the first time in the history of corporate India that a vice chairman and managing director of a company is questioning the buyback proposal of his firm just before the board meeting and after the announcement of the proposal in terms of appropriateness while hinting at some behind the curtain moves.

Market regulator Securities and Exchange Board of India today started assessing the legal provisions of the buyback in the wake of Anil Ambani's comments before the RIL board meeting.

SEBI Chairman G N Bajpai and Director Anantharamnan are believed to have started discussions on it within minutes of Anil Ambani's statement that "there is more than that meets the eye," in relation to the buyback. Anil said: "I believe considering a buyback at this stage is completely inappropriate as there are several serious issues that the company faces which need to be looked at." These companies -- Reliance Polyolefins Pvt Ltd, Reliance Energy [ Get Quote ] and Project Development Pvt Ltd, Reliance Chemicals Pvt Ltd, and Reliance Aromatics and Petrochemicals Pvt Ltd -- were lent money by Reliance Ventures Ltd, a subsidiary of Reliance Industries Ltd, for buying preference shares in Reliance Telecom Ltd and for making loans to other companies, on terms and conditions that were not known to the RIL shareholder. The implication of the new disclosures is that these four companies are not only special purpose vehicles used for parking a 4.7 per cent stake in RIL, they are also being used to route funds to other companies on terms and conditions that have not been made explicit to RIL shareholders. These fresh loans and investments in Reliance Telecom, which together amounted to Rs 697.52 crore (Rs 6.97 billion) as on March 31, 2003, were funded by zero coupon optionally convertible loans by a body corporate, which according to sources, is none other than Reliance Ventures Ltd. It is not known why RIL lent money to these four associate companies without reserving the right to keep the option to convert the debentures with itself. The directors of Reliance Ventures are said to be LV Merchant, Surendra Piparia and MD Sudharshan. It is not clear how the four companies can be shown as 'persons acting in concert' with the promoters of RIL, when they have been funded, not by the promoters or their associates, but by loans made by a subsidiary of RIL -- in effect by the company itself. Anil Ambani had requested Sebi to ask Reliance Industries for disclosures on some points. The first of these is the 7.5 per cent stake in Reliance Industries the Petroleum Trust holds, which is shown as part of the promoters' holding. The second is the 4.71 per cent stake in Reliance Industries held by four companies, Reliance Polyolefin, Reliance Aromatics and Petrochemicals, Reliance Energy [ Get Quote ] and Project Development and Reliance Chemicals. These companies are treated as "persons acting in concert" with the promoters of Reliance Industries. Anil Ambani had asked the regulator to seek disclosure on the ownership of the four companies. Reliance Industries said in its disclosures on Monday that it had accounted for the shares held by the Petroleum Trust and by the four companies in the "promoters/persons acting in concert" category in line with "the change in the definition of the expression 'promoter' in the Sebi (Substantial Acquisition of Shares and Takeover) regulations.

Finance Minister P Chidambaram [ Images ] had recently said that the two Ambani brothers were moving towards settlement and there was no need for any government intervention in the family dispute. To a query about the probe by his ministry on various complaints by Anil Ambani [ Images ] relating to corporate governance in Reliance group companies, Gupta said, "Once the report is received from registrar of companies, we will see what is there." In the midst of fight with his elder brother Mukesh, Anil had raised number of issues relating to corporate governance and insider trading in the RIL. Anil Ambani's [ Images ] proposed personal investment of Rs 3,000 crore (Rs 30 billion) in Reliance Capital [ Get Quote ] and Reliance Energy [ Get Quote ] has fetched him a notional gain of Rs 730 crore (Rs 7.3 billion) within a day. In the first direct intervention in the Reliance [ Get Quote ] affairs, government on Thursday said it has asked Registrar of Companies to issue notice to the group, headed by Mukesh Ambani [ Images ], on complaints filed by his younger brother Anil. We are not sleeping over the matter. We know what we have to do. We are getting feedback (on Reliance developments) from the Registrar of Companies," Gupta had said. Incidentally, market regulator Securities and Exchange Board of India had said on Wednesday that it would take appropriate action on complaints filed by Anil. Asked if Mukesh had also met him after he took charge as Sebi chairman earlier this year, Damodaran said, "I do not reckon so... many people have met me since then." Speaking on the sidelines of an Assocham seminar on "Disclosure Requirements", Damodaran said he would not like to get into specific details about any company when asked as to what Sebi would do in the case of a managing director of a mega company (RIL) not signing its financial accounts at the board meeting 'owing to absence of information and disclosure." "Anil has sent several letters... we are doing everything that is needed to protect the interest of investors," Sebi chief M Damodaran told reporters in New delhi when asked if Anil had lodged any formal complaint and filed papers about corporate governance and disclosure in the group during his meeting with the regulator two days ago. The spokesperson said from Mumbai [ Images ] that "Nikhil was involved in false briefing in violation of Sebi's insider trading regulation and fraudulent trade practices regulation." In the last four successive board meetings of the flagship company after July last, Anil, engaged in a bitter battle with Mukesh over ownership of Reliance empire, pleaded for defining his "role, responsibilities, authority and accountability," but the board has chosen to remain mum on it. RIL officials were not available for comments, but sources said during the December 27 meeting, the board termed the issue as "indoor management" and that there was no need to inform stock exchanges. Anil's grouse is that the change in the powers was not disclosed to shareholders, stock exchanges or Securities and Exchange Board of India [ Images ] despite the fact that he was a permanent director and vice chairman and managing director appointed by RIL shareholders at the AGM.

Government is looking into the issue of Reliance Infocomm Limited shares to ascertain whether any law has been violated in the allocation of one crore shares to three firms apparently at the rate of one rupee each, Finance Minister P Chidambaram [ Images ] said in the Rajya Sabha on Tuesday. "From the available balance sheets of the three companies, as at 31.3.2004, the price at which the three companies acquired shares in the erstwhile Reliance Infocomm Limited appears to be at Re 1 per share," the minister said during Question Hour.

Chidambaram said according to information furnished by the ministry of company affairs, three unlisted companies held shares in an unlisted public limited company -Reliance Infocomm Limited. Unlisted companies did not fall under the purview of Sebi as they are not governed by Sebi, he said and added the
Unlisted companies did not fall under the purview of Sebi as they are not governed by Sebi, he said and added the Board of Governors of the company was free to allocate shares to anybody. But, if it has violated any guidelines prescribed by Telecom Regulatory Authority, it was for the communication ministry to ascertain.

Has IPCL accepted Anil's resignation?

Reliance spokesperson refused to answer why Anil's name was missing from the company's website.

Although there were indications that IPCL may have accepted the resignation, Reliance officials parried the question on whether the company had informed the stock exchange authorities saying, "we will get back to you". As per the listing norms, a company has to inform stock exchange authorities immediately about any decision that may be price sensitive and have a bearing on investors. Ironically, in its letter of January 20, IPCL had written to the stock exchanges that Anil's resignation had been considered by the board that day and it had been decided that he should reconsider it.

Stock market sources pointed out that if the resignation was accepted on January 20, why didn't IPCL follow the rules and inform the BSE and NSE before doing so on Saturday. If he ceased to be member from January 20, why was Anil's letter of January 27 on the same issue considered by the board on March 30, they asked. If the resignation was accepted on March 30, why were the stock exchanges informed only on Saturday by way of a clarification to an IPCL letter of January 20, the sources asked. Meanwhile, the Bombay Stock Exchange [ Images ] said in a statement that none of its officials had stated that there was dichotomy in IPCL's communication on Anil Ambani's resignation. The media reports to this effect had not quoted any official by name or the BSE spokesman. In the continuing drama over his resignation from Reliance Group petrochemical company IPCL [ Get Quote ], Anil Ambani [Images ] has asked market regulator SEBI and stock exchange authorities to look into the issue as well as adherence to all relevant laws. wrote to SEBI, Bombay Stock Exchange [ Images ] and National Stock Exchange on Monday, coinciding with IPCL's public statement that the younger Ambani ceased to be a director from January 20. "The Board's request for reconsideration of resignation and the response of Anil Ambani with pre-conditions does not change the fact of him having ceased to be a director from January 20, 2005," IPCL had stated. Anil in his reply dated January 27, 2005 addressed to the Board, appreciated its gesture but did not reconsider his resignation and instead put further conditions on the Board which were not acceptable, the statement said adding these letters were noted by IPCL Board at its meeting on March 30, 2005. The statement also pointed out that Anil neither attended the Board meeting of January 20 nor sought leave of absence.

independent director Y P Trivedi - RIL board's corporate governance committee giving a clean chit to Mukesh, On further questioning, Anil, whose name was quietly deleted from the list of directors on IPCL's official Web site recently triggering a controversy, said he had not heard from the IPCL board so where was the question of 'reconsidering' resignation. Among the issues raised by him, included "related party transactions with Reliance Pharmaceuticals and Reliance Nutraceuticals -- whose details on ownership, financials and management were not known -- and in whose favour the effective ownership of a 23 per cent stake in IPCL [ Get Quote ] was transferred by Reliance Capital [ Get Quote ] of a value of over Rs 1,500 crore.

Sebi Chairman G N Bajpai As the investor base of Reliance group entities runs into millions, the developments in the group companies are of interest to the regulator and stock markets

Union Company Affairs Minister P C Gupta proclaims that the government has no role to play in the "ownership differences" in Reliance Industries Ltd as the management of the company is in perfect order.

http://in.rediff.com/money/2004/nov/26ril2.htm

GAS siblings are facing off once again, and this time the younger brother seems to have got the government to ask probing questions. But there s more to it. Does Mukesh legally have a right over the gas he is pumping out?